~~~BOQ SHARES SLUMP 8% AFTER CUTTING EARNINGS GUIDANCE

Bank of Queensland’s shares slumped almost nine per cent to their lowest in a month after the regional lender downgraded its full-year cash profit guidance.

The stock dropped $1.03, or 8.65 per cent, to $10.88 by 10.18 Sydney time on Thursday, their lowest since November 3.

BoQ said after the market closed on Wednesday that the trading update followed an extensive review of its commercial lending portfolio in response to weaker than expected trading conditions in its commercial property portfolio, particularly in Queensland.

Managing director David Liddy said the bank remained on target to increase cash profit in fiscal 2011, but had changed the range to between $210 million and $230 million.

This would deliver seven per cent to 18 per cent growth year-on-year, Mr Liddy said.

BoQ previously had forecast full year net profit between $220 million and $250 million.

Mr Liddy said the bank expected bad and doubtful debt expenses for the six months to December 30 of $85 million to $90 million, partly due to a rise in impaired commercial assets of $97 million.

“This is above the previous expectations of bad and doubtful debt expenses in the first half FY11 which was in line with second half FY10 results of $53 million," Mr Liddy said.